CryptoURANUS Economics: 06/15/21

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Tuesday, June 15, 2021

Mining Rig: Defined in CryptoCurrency

Mining Rig: 
Defined in CryptoCurrency














In-Short:
Mining rigs are defined as computer specially designed to maintain the blockchain, this process is known as mining.


Mining is the process of using computer power to solve a complex math problem, review and verify information, and create a new block so the information can be added to the blockchain.
 
Mining requires expensive mining and a lot computer power. People buy rigs and pay for lots of electricity so they can earn cryptocurrency. Because rigs are built especially for mining, they do the job faster than other computers and can earn more.



Building a Cryptocurrency Mining Rig: How to Keep Costs Small and Profits Big...

There are countless ways to make money with computers, but right now there are few as interesting and potentially lucrative as mining for crypto currency. The decentralization of money has led to a digital gold rush, as individuals, mining pools, and full-fledged mining companies vie for the same blocks. So how do you stake your claim and mine your own minty fresh crypto cash? It’s all about building your rig and balancing performance with efficiency.
Is it still profitable?

The first thing that you need to understand is that, just like rushing out to California, buying a pick, and riding your donkey into the hills, mining cryptocurrency is a bit of a gamble. Even the more obscure blockchains have thousands of miners racing each other to find the winning hash. The greater the competition, the more difficult the challenge and if you don’t win the block, that’s a lot of time and literal energy wasted.

The first decision you need to make is what currency you’re actually mining. This will influence every other decision you make and it is in itself a complicated question. You need to consider the currency’s value and block reward against the difficulty of the hash and how many other miners are chasing the prize. The more difficult the race, the meaner your machine needs to be.


You’ll also need to consider the investment side of the equation. Some mining can be done with the PC you already use, but in most instances getting serious about mining means you’re going to want to invest in a purpose-built system. That means spending real money and it could range from hundreds to tens of thousands of dollars depending on the currency you’re chasing and how competitive you want to be.


Of course, that’s just a starting investment. The day-to-day cost, the incremental loss, is electricity. Throwing around hashes in the trillions per second makes a rig mighty hungry, and even moderate mining can make a noticeable impact on your power bill. So not only do you have to be mindful of your rig’s performance, you need to balance your profits against the increase in your electrical bill.
 
If you haven’t already chosen the crypto you covet or even if you have, we recommend checking out a Mining Calculator. WhatToMine.com seems a little daunting at first glance but that’s only because it’s incredibly comprehensive. It can help you determine which currency you should start mining, and which parts are best for your rig by calculating their hashrate and power draw. It can even factor in the price of electricity in your area.


It’s important to remember that there are more ways to make money than just mining for gold. When everyone else heads into the hills to dig, you can make a lot of money selling shovels. We’re of course not encouraging you to start fabricating shovels (that’s a saturated market), no we’re saying that there are ways that you can build a rig, and sell or rent your hashrate power to someone else. Taking some of the risk out of the equation though also diminishing the reward.

What you’ll need
The list is pretty short really. You need a crypto wallet to keep your currency. You need mining software to actually do the thing. And of course you need hashrate power, either purchased off someone else, or generated by your own mining rig.

Let’s start with software since it’s probably the least stressful decision you’ll need to make. They’re almost all free and they all do versions of the same thing, but there are still things to consider. The currency you’re mining is most important because you’ll need software that can actually mine that currency. There are also features and customizations offered by some programs that aren’t available universally. Start with the currency compatibility and make your decisions from there.


What’s in a Wallet(?):

You can’t stuff Bitcoin in an old mattress and there’s no Ethereum in the Banana Stand. If you’re going to keep your coin keys safe, you’ll need some sort of storage. There are basically two sorts of storage to choose from and while one is definitely more secure than the other, neither is perfect just yet.


Cold storage refers to actual physical storage devices. They’re referred to as cold storage because they exist offline and are not remotely accessible on their own. This means that no one can just hack in and steal your Litecoin. They have their own password protections as well which makes them doubly secure. That being said you do need to be mindful of compatibility between your wallet and your currency. Physical data storage also opens you up to the possibility of corruption, and unlike traditional money, with digital currency corruption usually leads to less wealth.


Most crypto wallets don’t look like much more than a flash drive so you can easily take them with you wherever you roam. Being small and easily portable like the Ledger Nano S or the BC Vault One is great, but it also means you could lose your money the old fashioned way. By literally losing your wallet. Imagine a thumb drive falls out of your pocket in an Uber, but instead of just losing the digital copy of Alita: Battle Angel you never leave home without, you instead lose several thousand dollars’ worth of cryptocurrency. Which is the greater tragedy? Who can say?

Ledger, Wallet, Keys, and PenLong DescriptionLedger!? I hardly even Augur!


Hot storage on the other hand is all digital and while that makes it less secure in general, it also makes it much more convenient to trade or exchange. Software like coindirect or apps like Trust do take security seriously, and again, if you’re moving small amounts of currency around with any sort of frequency, the freedom and flexibility offered by these digital options may be the right decision for you. Just remember to research the transaction fees associated with each wallet and again, check to make sure it works with the currency you’re mining.


What goes into a rig(?):
There are three basic categories for mining rigs, CPU, GPU, and ASIC (Application-Specific Integrated Circuit). Just like everything else, the biggest factor in choosing the right rig is the currency you’re trying to mine. Once upon a time, you could mine Bitcoin with just the CPU in your desktop and a twinkle in your eye. Now very few currencies can be effectively mined with such menial processing power, and if you want to mine Bitcoin specifically, you’re going to need an impressive purpose-built machine.
 
CPU:
CPU mining is kinda just what it sounds like. You’re using the processing power of your CPU to generate hashes. This was fine and good a few years ago, but as crypto mining became more popular it also grew in competition and there’s nothing that breeds like tech advancement like competition. Your CPU just isn’t powerful enough to out-calculate a purpose-built ASIC or a mining rig running six top of the line GPUs.


That being said there are currencies out there that try to protect the average miner from being completely outclassed by those who can afford bigger toys. Monero is one such currency. They design themselves to be “ASIC Resistant” in an attempt to keep their cryptocurrency as decentralized and egalitarian as possible.

AMD Ryzen Threadripper CPULong DescriptionRippin’ threads and breaking Hz...

If you’re looking to dip your toe into data mining, a high end CPU like AMD Ryzen Threadripper 3990X is obviously the gold standard. Its sixty-four cores and 128 threads blaze do a lot of work, but it’s the enormous 256 MB L3 cache that really lets the hashrate fly. It can generate 64 MHs which is not a lot compared to other devices we’ll discuss in a second, but mining the right currency that’s more than enough to compete. The upside to CPU mining of course is that this investment is still beneficial to your PC even if mining doesn’t PAN out.

Another drawback to CPU processing besides its hash per second limitations is the risk of overheating. Cranking out that many complex computations can generate dangerous amounts of heat so you’ll want to make sure you have a cooling system that can take the strain.


The Cooler Master MasterLiquid ML360 TR4 is designed specifically to keep the Threadripper ripping without excess heat, and it still has a nice RGB style to it. If you want something a little less flashy, the Noctua NH-D15 is an affordable option that still boasts features like PWM and airflow up to 82.52 cfm!


GPU:
MSI GeForce RTX 3080 GPULong DescriptionRTX-cuse me while I hash and mine GPU mining is a little more complicated but a lot more common. It’s really hard to get a bunch of CPUs to work together toward a common goal. It’s a lot easier to connect a bunch of powerful GPUs to one motherboard and set them to a task.

 Choosing the right GPU can be tricky at best, but it’s a thrilling part of the chase and there’s no silver-bullet answer.


Nvidia and AMD are of course the two main contenders and they each have attractive options for both the experienced hash cracker and the more minor miner. The MSI GeForce RTX 3090 is a solid option performance wise but it’s definitely a heavier investment that’s hard to come by. It’s capable of hashrates right around 110 MHs depending on the algorithm you have it hunting.


You can also find success with the XFC Radeon VII which isn’t quite as powerful, but runs more efficiently. Remember that these stats are only half the issue and the price of electricity in your area can greatly affect the balance of this cost-to-profit equation so again, please make sure you’re doing your due diligence.


Motherboard:
But a GPU has to connect to something and just one GPU isn’t going to deliver the hash power you need to be competitive. You’re going to need a motherboard for that rig and the more GPUs it can accommodate, the better. You want a motherboard that can connect at least six GPU. The MSI PRO Z390-A can handle that while also maintaining a respectable price tag. If you’re really going for the gusto you should look into the ASUS B250 Mining Expert that con connect up to nineteen GPUs, for some serious block busting power.


Case / Frame:
Of course all those GPUs won’t fit in your average PC case and you can’t just have them lying around on the floor. You’re going to need a frame for your rig. There are plenty of schematics for building your own mining frame but if you’d rather just invest in one you know you can trust, check our stock.


We have simple low cost options like this ASTARIN 6 GPU Mining Case, but of course you can always spend more. If you want something that can hold more GPU and look a little cleaner, check out this Magnalium Alloy Mining Rig Case that can accommodate up to twelve graphics cards. Just remember that your frame should have at least as many slots as you have GPUs in your rig, and you’re going to have to make sure it fits wherever you plan on keeping it in your home.


PSU:
EVGA Supernova 80+ PSULong DescriptionP.S You need a PSU
You’re going to need to run power to all those GPUs, not to mention the CPU and motherboard. If you’ve ever built a PC from scratch you’re already familiar with calculating a rig’s power draw. 

This isn’t really any different, you’re just using a lot more power hungry components for this type of machine. Remember, it’s important that you not only provide enough power for all the components, your energy consumption is a huge part of your profit equation.


That’s why finding the right power supply is so important. Consider the EVGA Supernova 1600 T2 which is fully modular and boasts an 80+ Titanium efficiency rating. Or you could save a little money with the Thermaltake Toughpower 1500W. It’s only 80+ Gold certified and semi modular but it can move plenty of juice for a much more manageable initial cost. Definitely invest in a PSU with 80 Plus Gold certification or higher.


ASIC:  
We saved the most powerful option for last. ASIC is short for Application-Specific Integrated Circuit, and basically describes a small but mighty computing machine built with one specific purpose in mind, in this case, mining cryptocurrency. They are incredibly powerful, and they lead the pack in their ability to generate hashes. They are also exceedingly expensive, quickly outdated by newer models, and somewhat controversial in their capabilities.


These workhorses are so powerful they can actually alter the landscape of the cryptocurrencies they mine. They can out hash most home-built rigs and are so expensive that your average miner just can afford them. And even if a miner feels like sinking several thousand dollars into a lean mean hash slinging machine, large companies and those with deep pockets can build big enough banks of them to decimate your odds of winning a block.


That’s just the start. Those big banks of ASIC also end up working against the principles that helped make cryptocurrencies like Bitcoin so attractive in the first place. By snatching up a disproportionately large number of blocks, these banks somewhat undermine the concept of decentralized currency.

That’s why some cryptocurrencies are fighting against the tide and attempting to be what’s known as ASIC resistant. Monero specifically tries to limit the amount of ASIC mining that goes into its blockchain. That means less intense competition which in turn means that prospectors can engage competitively at a much lower starting investment. That being said, no mining algorithm is completely ASIC resistant so they are always going to play a role.


If you’re after the big fish, if you’re mining Ethereum or Bitcoin, you’re going to want to look at these devices. They carry a hefty price tag, but they can reap tremendous rewards and as technology nears the cap of physical limitation, the worry of these high-investment machines being quickly outdated is becoming less daunting by the day.


If these are the droids you’re looking for, the last step is making sure, once again, that the device you’re looking to buy is capable of mining the currency you want to mine. ASICs are so specialized that they are specific to different types of hash algorithms. An ASIC designed to mine Bitcoin’s SHA-256 algorithm can be modified to mine Peercoin because they use the same algorithm. However you can’t use the same machine to mine Dash however, as that cryptocurrency uses the X11 algorithm.


WhatsMiner Doc? / Long DescriptionA Sick ASIC!:
If you’re mining the right currency and have the resources to spend then an ASIC is almost certainly the way to go. If you’re after Bitcoin check out the WhatsMiner ASIC that boasts an insane 33THs hashrate! Of course, there are always options and it’s up to you to do the research and find what’s best for the operation you’re trying to run. Keep in mind that these devices will also need a PSU, so make sure you’re factoring that into your investment calculations.


Mining is inherently risky, with many more ways to spend money than opportunities to make it, but with the appropriate amount of planning and research there is money to be made. And just like the gold rush that sent people running for the California hills, mining cryptocurrencies wouldn’t be nearly as exciting if it were easy.
 

Mining Pool: Defined in CryptoCurrency

Mining Pool:
Defined in CryptoCurrency




 











What Is a Mining Pool(?):

A mining pool is a joint group of cryptocurrency miners who combine their computational resources over a network to strengthen the probability of finding a block or otherwise successfully mining for cryptocurrency.


KEY TAKEAWAYS:
Cryptocurrency mining pools are groups of miners who share their computational resources.
Mining pools utilize these combined resources to strengthen the probability of finding a block or otherwise successfully mining for cryptocurrency.

If the mining pool is successful and receives a reward, that reward is divided among participants in the pool.
How a Mining Pool Works Individually, participants in a mining pool contribute their processing power toward the effort of finding a block. If the pool is successful in these efforts, they receive a reward, typically in the form of the associated cryptocurrency.


Rewards are usually divided between the individuals who contributed, according to the proportion of each individual's processing power or work relative to the whole group. In some cases, individual miners must show proof of work in order to receive their rewards.


 Rewards are usually split among the miners based on the agreed terms and on their respective contributions to the mining activity.

Anyone who wants to make a profit through cryptocurrency mining has the choice to either go solo with their own dedicated devices or to join a mining pool where multiple miners and their devices combine to enhance their hashing output. For example, attaching six mining devices that each offers 335 megahashes per second (MH/s) can generate a cumulative 2 gigahashes of mining power, thereby leading to faster processing of the hash function.

Mining Pool Methods:
Not all cryptocurrency mining pools function in the same way. There are, however, a number of common protocols that govern many of the most popular mining pools.


Proportional mining pools are among the most common. In this type of pool, miners contributing to the pool's processing power receive shares up until the point at which the pool succeeds in finding a block. After that, miners receive rewards proportional to the number of shares they hold.

Pay-per-share pools operate somewhat similarly in that each miner receives shares for their contribution. However, these pools provide instant payouts regardless of when the block is found. A miner contributing to this type of pool can exchange shares for a proportional payout at any time.

Peer-to-peer mining pools, meanwhile, aim to prevent the pool structure from becoming centralized. As such, they integrate a separate blockchain related to the pool itself and designed to prevent the operators of the pool from cheating as well as the pool itself from failing due to a single central issue.

Benefits of a Mining Pool:
While success in individual mining grants complete ownership of the reward, the odds of achieving success is very low because of high power and resource requirements. Mining is often not a profitable venture for individuals. Many cryptocurrencies have become increasingly difficult to mine in recent years as the popularity of these digital currencies has grown and the costs associated with expensive hardware necessary to be a competitive miner as well as electricity oftentimes outweigh the potential rewards.

Mining pools require less of each individual participant in terms of hardware and electricity costs and increase the chances of profitability. Whereas an individual miner might stand little chance of successfully finding a block and receiving a mining reward, teaming up with others dramatically improves the success rate.

Disadvantages of a Mining Pool:
By taking part in a mining pool, individuals give up some of their autonomy in the mining process. They are typically bound by terms set by the pool itself, which may dictate how the mining process is approached. They are also required to divide up any potential rewards, meaning that the share of profit is lower for an individual participating in a pool.

A small number of mining pools, such as AntPool, Poolin, and F2Pool, dominate the bitcoin mining process, according to blockchain.com. Although many pools do make an effort to be decentralized, these groups consolidate much of the authority to govern the bitcoin protocol. For some cryptocurrency proponents, the presence of a small number of powerful mining pools goes against the decentralized structure inherent in bitcoin and other cryptocurrencies.


In-Short:
A mining pool is defined as a group of people who combine their computing power to solve a complex math problem on the blockchain for a reward.


People join a mining pool to increase their chances of solving the blockchain math problem so they can earn a reward of transaction fees and new coins.
Once the reward is won, it is split among all of the members of the group. In a pool, you often win the reward frequently but because it is shared, the payout is smaller.

Mining Difficulty: Defined in CryptoCurrency

Mining Difficulty:
Defined in CryptoCurrency











What does mining difficulty mean(?):

The mining difficulty of a cryptocurrency such as Bitcoin indicates how difficult and time-consuming it is to find the right hash for each block. 

Mining difficulty is a measurement unit used in the process of Bitcoin mining
Difficulty indicates how difficult it is to solve a complex cryptographic puzzle
The difficulty of mining new units increases or decreases over time, depending on the number of miners in the network.

Increases in difficulty are necessary in order to keep the target block time
In this lesson, you will learn the basics of mining difficulty.
Ready to receive free BEST? Test your knowledge here!

Beginners' Quiz:
As a cryptocurrency like Bitcoin becomes more popular, the number of computers participating in its peer-to-peer network increases. Miners compete against each other for limited block rewards. With more participants and more computing power, the so-called “hashpower” of the entire network increases accordingly.

This is also referred to as the mining difficulty or difficulty, which is easier to understand once you grasp the basics of Bitcoin mining. You already learned that Bitcoin transactions are stored in blocks, which are added to the blockchain every 10 minutes (= 600 seconds). 

To maintain the time it takes to process one block at around 10 minutes, difficulty has to be adjusted periodically.

Mining difficulty in the Bitcoin network is adjusted automatically after 2,016 blocks have been mined in the network. An adjustment of difficulty upwards or downwards depends on the number of participants in the mining network and their combined hashpower.

Mining equipment has evolved considerably since the beginnings of Bitcoin 
In the early days, the first miners used the CPUs of their PCs to mine Bitcoin.
Miners eventually realised that graphics cards are better suited for mining Bitcoin. However, graphics cards also need more energy.

In recent years, special “ASICs” (application-specific integrated circuit chips) have been developed specifically for Bitcoin mining.

Presently, Bitcoin and other digital currencies are mined via mining pools, where lots of miners join forces and combine their hash rates in the quest for block rewards.

Solving the mathematical puzzles for valid block creation requires huge amounts of computational power. Because the difficulty is rising continually, miners join forces in Bitcoin mining pools and solve the mathematical puzzles together. The first individual miner or the mining pool that finds the right hash gets the block reward. 

Usually, block rewards consist of new coins or tokens native to a blockchain network such as Bitcoin. In a mining pool, block rewards are split among participants in proportion to their share of computing power in the mining pool. This way each participant is adequately invested in the process.

Bitcoin mining is like searching for a needle in a haystack. Many hashes are created by Bitcoin code, but only one of them is the right one. 

We already know that “mining” for digital currencies is like searching for a needle in a haystack rather than actually digging for gold. There are other differences, too. 

Unlike gold, of which there are still undiscovered deposits all over the planet (and in space), Bitcoin has a limited and finite number of 21 million units. As of now, more than 85% of all bitcoins have already been mined, and it is estimated that the last bitcoin will be mined by 2140. 

What happens to difficulty when the last bitcoin has been mined?
After all 21 million bitcoins have been mined, miners will still need to contribute to the Bitcoin network in order to keep it running. New blocks will still be generated, but the rewards will change. Instead of getting new coins as a block reward, miners will receive a share of the transaction fees spent by people who send transactions within the network.


IN-SHOT:
Mining difficulty is defined as a measure of how hard it is to maintain and add to the blockchain.


With bitcoin, users are required to own a computer that runs the blockchain program and compete to solve a complex math problem. The first miner to solve this problem creates a new block and typically, this process happens every 10 minutes.
However, the more computers competing to solve the math problem, the quicker blocks will be discovered. To keep block creation at a fixed speed, every 2,016 blocks (every 2 weeks), mining difficulty is adjusted.

As mining difficulty increases, the amount of work required to create a new block and earn the reward increases.


Microtransaction: Defined in CryptoCurrency

Microtransaction:
Defined in CryptoCurrency












What are microtransactions?
 
In a nutshell, microtransactions refer to any purchases made during a game.


For example, if a player wanted to buy a new skin for their character or a new weapon, they could pay a small price - maybe €1.99 - and gain access to it. Most games that contain microtransactions do so in conjunction with offering the game itself free-of-charge.


This means you can download and play the game for free, but if you want to play extra levels, select more skins or items, or have more features in the game, you must pay for them. Prices vary, but microtransactions are one of the most profitable new parts of the gaming industry - and one of the most reviled.


Generally speaking, microtransactions in gaming are referred to in a derogatory fashion as "pay-to-win" games. If you pay for the best equipment in the game, you'll have a better chance of winning over someone who hasn't. Multiplayer gaming is supposed to be about who's the best player, not who can afford to buy the best equipment or items, hence the bad sentiment.


Another aspect of why microtransactions are so hated by players is that they can sometimes constitute a form of gambling. The basic concept of "loot boxes" is that players will pay a small price for a random assortment of items that they won't have any idea about before purchase. In some instances, players can receive extremely rare items. Other times, it's stuff they already have.


In 2017, the Gaming Comission of Belgium described loot boxes as a form of underage gambling, and called for them to be banned in Europe. Developers specifically target players in trying to get them to buy loot boxes, which has resulted in serious backlash over the years.


For example, 'Star Wars: Battlefront II' featured loot boxes, as well as having special characters only available through microtransactions. The backlash was so extensive that EA Games eventually relented and removed both loot boxes and microtransactions from the game for a period of time while the system was quietly reworked and relaunched.

Microtransactions are most popular in mobile games such as 'Candy Crush', 'Dead Trigger' and 'Clash of Clans'. A study in 2013 found that over 90% of all revenue generated by iPhone and Android app stores came from free-to-play games with microtransactions.


As the production costs for major games like 'Red Dead Redemption II' begin to reach those of major movie blockbusters ('Red Dead Redemption II' had an estimated budget of $200-300 million), developers and distributors are looking at ways to keep players playing their games longer, specifically so that they can make more money from them.

Never mind the fact that these games must be bought at a cost of anything up to €80, additional items like skins, weapons and the like are made available to be purchased through in-game stores - all using microtransactions. Games like 'Grand Theft Auto V', which was released back in 2015, still have an active playerbase - solely from downloadable content that gives players new cars, new weapons and new missions to play online in multiplayer, all paid for with microtransactions.


Despite the distaste for microtransactions by players, the fact remains that they're here to stay as long as players keep buying. The second anything becomes unprofitable for developers, it's usually jettisoned in favour of something that is.
 

Microbitcoin [uBTC]: Defined in CryptoCurrency

Microbitcoin [uBTC]:
Defined in CryptoCurrency










The mission of UnitedBitcion is to find a purpose for lost Bitcoin and inactive wallets and create a stable cryptocurrency system through an association of joint credit and smart contracts.

Microbitcoin, also known as the abbreviation uBTC, is one millionth of a bitcoin or 0.000001 of a bitcoin. 

uBTC=microbitcoin=1 millionth of a bitcoin=0.000001BTC

mBTC is equivalent to a Millibitcion which equates to 1 thousandth of a Bitcoin and numerically represented as 0.001BTC.
Similarly, uBTC is equivalent to a microbitcoin which equates to 1 millionth of a Bitcoin and numerically represented as 0.000001BTC.



Megabitcoin: Defined in CryptoCurrency

Megabitcoin: Defined in CryptoCurrency











The Case for Using mBTC Over BTC Denominations mBTC:

As bitcoin’s price has gained quite a bit of value over the past few months, many bitcoin proponents have been asking the community to start thinking about using mBTC denominations rather than using decimal points. People proposing this idea believe it’s the right time to start referring to bitcoin percentages below one bitcoin in this fashion, to make calculations easier and to attract new users who think one bitcoin is too expensive.


Using mBTC Denominations:
The Case for Using mBTC Over BTC Denominations The fiat value of bitcoin is getting seemingly close to the US$2000 range as the price per BTC hit an all-time high on May 11 reaching $1890 across global exchanges. Since bitcoin’s value is growing larger a bunch of cryptocurrency enthusiasts have proposed people start using mBTC denominations. 

One mBTC, otherwise known as a millibitcoin, is one thousandth of a whole bitcoin, or 0.001BTC. At current market prices, one mBTC is worth $1.85, and people have been bolstering the mBTC idea well before one mBTC was a dollar.

The reason people would like to use the mBTC unit measurements instead is because it’s easier for humans to innumerate and communicate smaller portions of bitcoin. 

Furthermore, some people just learning about bitcoin sometimes believe they have to purchase a whole coin, which is not the case as anyone can purchase bitcoins in fractions. 

So bitcoin proponents believe using units of mBTC to describe smaller portions would allow new users to better conceptualize that they can buy ten dollars worth or 5 mBTC. 

There are a few wallet services and business that use the mBTC unit denomination within their application’s interface. Wallets that use mBTC include Electrum, Blockchain, and Mycelium. 

Satoshis & Bits:
Another terminology that measures smaller portions of bitcoin in units is called a “Satoshi”, named after Bitcoin’s creator. A Satoshi is the smallest fraction of bitcoin that can be recorded on the blockchain and equals one hundred-millionths of a whole bitcoin (0.00000001 BTC). 

The name caught on around 2010 after a lot of discussion concerning the topic came up in forums. Sometimes traders refer to one Satoshi as a “Sat” which is just an abbreviation. A “bit” is another terminology used to describe a millionth of a bitcoin.

The Case for Using mBTC Over BTC Denominations Using Satoshis and bits as a language to discuss smaller bitcoin denominations is more widely used than mBTC. A few symbols have been created to represent a Satoshi measurement, but nothing has gained widespread adoption.

Would it be Easier to Explain to New Users(?):
The Case for Using mBTC Over BTC Denominations Throughout the past few weeks, the topic of changing the denomination language has come up in forums a lot more than usual. On May 11, one bitcoin proponent describes why people should think about mBTC units, saying that it would be far easier to communicate to new users.  

“Many new people that ask to me about bitcoins are “scared” by the fact that to buy a bitcoin you need several thousand of euros,” explains the post.

To buy 0.05 of “something” sounds weird and little. So I think the community would greatly benefit if it switches to mBTC in exchanges and wallets. Also for shopping it would be easier to think that you are paying for a beer that costs three mBTC and not 0.003 BTC.

Others believe things are just fine the way it is and it would be too difficult for the community and industry to adopt this language. Furthermore, some believe wallets companies, exchanges, and bitcoin-based businesses should decide to use whatever they prefer.

Moreover, due to the rise of miner fees, some say the proposal of mBTC units is futile as many smaller denominations of bitcoin held in wallets can’t be used and are essentially unspendable addresses.

For now changing the language of bitcoin units probably won’t happen very quickly but there are those that believe the cryptocurrency environment is still young and starting this trend now would be helpful for communication.

What do you think about promoting the use of mBTC for smaller bitcoin denominations? Let is know in the comments below.

Merkle Tree: Defined in CryptoCurrency


Merkle Tree: 

Defined in CryptoCurrency












Merkle TreeExplained




What is a Merkle Tree(?):

A Merkle tree is a data structure that is used in computer science applications. In bitcoin and other cryptocurrencies​, Merkle trees serve to encode blockchain data more efficiently and securely.



Breaking Down Merkle Tree:

In bitcoin's blockchain​, a block of transactions is run through an algorithm to generate a hash, which is a string of numbers and letters that can be used to verify that a given set of data is the same as the original set of transactions, but not to obtain the original set of transactions. Bitcoin's software does not run the entire block of transaction data – representing 10 minutes' worth of transactions on average – through the hash function at one time, however. Rather each transaction is hashed, then each pair of transactions is concatenated and hashed together, and so on until there is one hash for the entire block. (If there is an odd number of transactions, one transaction is doubled and its hash is concatenated with itself.)


Visualized, this structure resembles a tree. In the diagram below, "T" designates a transaction, "H" a hash. Note that the image is highly simplified; an average block contains over 500 transactions, not eight.


Merkle Tree:

The hashes on the bottom row are referred to as "leaves," the intermediate hashes as "branches," and the hash at the top as the "root." The Merkle root of a given block is stored in the header: for example, the Merkle root of block #482819 is e045b18e7a3d708d686717b4f44db2099aabcad9bebf968de5f7271b458f71c8. The root is combined with other information (the software version, the previous block's hash, the timestamp, the difficulty target, and the nonce) and then run through a hash function to produce the block's unique hash: 000000000000000000bfc767ef8bf28c42cbd4bdbafd9aa1b5c3c33c2b089594 in the case of block #482819. This hash is not actually included in the relevant block, but the next one; it is distinct from the Merkle root.


The Merkle tree is useful because it allows users to verify a specific transaction without downloading the whole blockchain (over 130 gigabytes at the end of August 2017). For example, say that you wanted to verify that transaction TD is included in the block in the diagram above. If you have the root hash (HABCDEFGH), the process is like a game of sudoku: you query the network about HD, and it returns HC, HAB, and HEFGH. The Merkle tree allows you to verify that everything is accounted for with three hashes: given HAB, HC, HEFGH, and the root HABCDEFGH, HD (the only missing hash) has to be present in the data.


Merkle Tree 2:

Merkle trees are named after Ralph Merkle, who proposed them in a 1987 paper titled "A Digital Signature Based on a Conventional Encryption Function." Merkle also invented cryptographic hashing.


In Short:

A Merkle tree is defined as a way to organize lots of data in a small, efficient and secure package.

In 1979 Ralph Merkle, a computer scientist, created a patent for Merkle trees. A Merkle tree uses computer technology known as “hashing” to take information and turns it into letters and numbers of a certain length.


For example, “I like bitcoin” can be hashed and will equal: ad3e58f21b94f32dcadca6b71df4c31a18179f38011551a17a80d0ff065d22c5


If I were to capitalize the “b” in bitcoin, so it says, “I like Bitcoin” the hash will be completely different:

d988ca30eaa88c0410ad6e48a5297c0d505dcee572f9884f1a6fa2cbc8dedc86
Hashes cannot be reversed to get the original text. But you can verify the above hashes are correct simply by going to this website and typing in the same text as above: https://www.movable-type.co.uk/scripts/sha256.html


A Merkle tree works like this:
Two units of information are individually hashed. These are known as Merkle leaves.
Those two hashes are then hashed together. These are known as Merkle branches.
Multiple branches are hashed together finally getting one single hash. This is known as a Merkle root.

A Merkle tree is useful because it allows computers to verify information at the bottom of the tree, the leaves, without having to store the entire set of information.

Mega-Hashes: Defined in CryptoCurrency

Mega-Hashes: Defined in CryptoCurrency












Hash rate is defined as the speed that a computer can take any set of information and turn it into letters and numbers of a certain length. Hash rate is also the combined hash speed of every computer in the network. Hash rate is calculated at hashes per second (h/s).

Hash rate is important for computers that mine. Mining is the process of recording and verifying information on the digital record known as the blockchain. The blockchain is made up of a sequence of single recordings known as a block.


To keep the blockchain network running smoothly, only one block can be created at a time. To control when blocks are created, users are required to make their computers solve a math problem involving hashing. The first computer to solve this problem can create a new block and record information on the blockchain.


Miners often purchase very expensive specially designed computers that have higher hash rates to increase their chances of solving the math problem first. These mining computers use tons of electricity to power their computers. This expensive process earns miners a reward in brand crypto plus fees paid by each user for their transactions.


Similar to memory size, hash rate is counted like this:

  • 1 kilo hash per second is one thousand (1,000) hashes per second
  • 1 mega hash per second is one million (1,000,000) hashes per second.
  • 1 giga hash per second is one billion (1,000,000,000) hashes per second.
  • 1 tera hash per second is one trillion (1,000,000,000,000) hashes per second.
  • 1 peta hash per second is one quadrillion (1,000,000,000,000,000) hashes per second.
  • 1 exa hash per second is one quintillion (1,000,000,000,000,000,000) hashes per second.

Masternode: Defined in CryptoCurrency

Masternode: Defined in CryptoCurrency





  • 1. A masternode’s managing role is to vote on proposals to improve the Dash system. Every masternode gets one vote.
  • 2. A masternode’s special jobs include creating instant transactions, known as “InstantSend”, and private transactions that hide the fact that you’ve sent money, known as “PrivateSend”.












Masternode Introduction:

People usually think that only those who can analyze the market trends or are day traders can make money in the crypto space. But that’s not the case! In the crypto space, until the concept of masternode was first introduced, making money mainly required holding the cryptocurrency itself and hoping for the price to increase. However, relatively stable and regular returns are now a reality with masternode hosting. But let’s first be clear what a masternode is before you can explore how to make money by hosting one.
 

What is Masternode(?):

Simply speaking, a masternode is a server on a decentralized network that keeps the full copy of the blockchain in real-time. It has unique functions which makes it different from normal nodes. They include features like doing instant transactions, increasing the privacy of transactions, and direct send.

Masternodes stores all information about the network in wallets that are fully synchronized and 24*7 connected with the blockchain network. Masternodes also validates or rejects new transactions that are added in the process of generating a new block.

Hosting a masternode is often expensive and relatively complex. Hence it’s not open to the usual node operators. However, masternode owners are well rewarded. Eventually, it helps cryptocurrency to develop and grow and simultaneously giving an additional source of income.


Factors to consider before setting up Masternode:

Masternodes can be run by anyone for a cryptocurrency. However, there is an entry criterion in place to ensure that the system doesn’t get malicious. The entry barrier is what one needs to collateralize certain units of that particular cryptocurrency to run a masternode.

This is done to avoid any frauds or corruptions by masternode owners. So naturally, it becomes very less likely that a masternode operator will do any fraud because he has a stake in running the whole system.

In order to become a masternode, you must consider the below factors:

A masternode is an always online computer (ideally — a server) that has a static IP and is running cryptocurrency wallet software that is fully synchronized with the blockchain network.

Your wallet should possess specific technical parameters: switched on 24/7, the power of the computer, etc.

To run a masternode you must purchase in a specific amount of coins to deposit into the wallet as collateral (For DASH minimum you need 1000 DASH units and for PIVX minimum you need 10,000 PIVX units). So this minimum units varies from crypto to crypto. This is mostly a much bigger expenditure besides the hardware costs.

The volume of such collateral varies from coin to coin, but it is always a considerable amount of money. The collateral can’t be withdrawn as long as the masternode is running. However, when the user decides to stop supporting the payment network then they can transfer and sell the coins from the wallet.

Running a Shared Masternode is the obvious solution if you can’t afford to run a full masternode because of the high entry barrier. Multiple users can pool in their coins with a defined minimum stake. Once the pool accumulates 100% of the coins needed to run a Masternode, the fee generation model commences. As per users’ percentage of the overall stake, the fees are distributed among the users.

Depending on the network and other aspects, masternodes may be rewarded once per day, or even several times per day. The other factors include the specific coin that is chosen, the price increase in that coin and the particular protocol.

The masternode operator will require to take a look around and find the coins that are offering the most potential ROI monthly. However, one of the most important aspects of that equation is the expected price appreciation of the coin. 

How to Host a Masternode:

Setting up your own masternode can be quite a complex procedure that would require some familiarity with Linux command line. If this is something that you do not feel completely comfortable with then there are other options available. One of the easier options is to make use of reliable third-party hosting services. However, these will require monthly expenses which could take a good part of your return.

Whichever option you pick, running a masternode can be an attractive alternative to just holding your crypto coins. It will give that added advantage of your money working for you and providing you with cryptocoins while you sleep.

Your server hosting costs should be somewhere into the dozens of dollars depending on which company you go to and what package you choose. Proper due diligence must be carried out before purchasing the Masternode hosted services. You’ll need to do some research and see what route or what package is right for you, but rest assured you have multiple options.


How much Money can Investors make from Masternodes(?):

Masternodes are very useful for crypto investors because it gives them the opportunity to make a stable passive income. Different cryptocurrencies have different incentive models through which a Masternode operator can earn a decently monthly or weekly income. Different models depend on a few factors...


How that coin assists masternodes:

How much the selected coin appreciates in price in the coming years
If all coins are worth significantly more in the coming ten years, then running masternodes will end up being very profitable for everyone who took the leap with one regardless of which coin you chose. Though, no matter how obvious it seems that the crypto economy has heaps and bounds to grow from here, nothing is guaranteed in the cryptospace.

Masternode operators typically earn anywhere between five percent and 20 percent of a given block reward, depending on which coin is being supported. These rewards help compensate the costs of running masternodes in the first place, while also motivating the creation of further masternodes.


Summarization:

To summarize, it’s evident that masternodes make for a relatively effective passive source of stable income. It attracts users who can’t or chooses not to constantly monitor the state of the cryptospace or trade on crypto exchanges frequently.

Millibitcoin: Defined in CryptoCurrency

Millibitcoin: Defined in CryptoCurrency











The Case for Using mBTC Over BTC Denominations mBTC:

As bitcoin’s price has gained quite a bit of value over the past few months, many bitcoin proponents have been asking the community to start thinking about using mBTC denominations rather than using decimal points. 

People proposing this idea believe it’s the right time to start referring to bitcoin percentages below one bitcoin in this fashion, to make calculations easier and to attract new users who think one bitcoin is too expensive.


Using mBTC Denominations:

The Case for Using mBTC Over BTC Denominations The fiat value of bitcoin is getting seemingly close to the US$2000 range as the price per BTC hit an all-time high on May 11 reaching $1890 across global exchanges. Since bitcoin’s value is growing larger a bunch of cryptocurrency enthusiasts have proposed people start using mBTC denominations. 

One mBTC, otherwise known as a millibitcoin, is one thousandth of a whole bitcoin, or 0.001BTC. At current market prices, one mBTC is worth $1.85, and people have been bolstering the mBTC idea well before one mBTC was a dollar.

The reason people would like to use the mBTC unit measurements instead is because it’s easier for humans to innumerate and communicate smaller portions of bitcoin. Furthermore, some people just learning about bitcoin sometimes believe they have to purchase a whole coin, which is not the case as anyone can purchase bitcoins in fractions. 

So bitcoin proponents believe using units of mBTC to describe smaller portions would allow new users to better conceptualize that they can buy ten dollars worth or 5 mBTC. There are a few wallet services and business that use the mBTC unit denomination within their application’s interface. Wallets that use mBTC include Electrum, Blockchain, and Mycelium. 


Satoshis & Bits:

Another terminology that measures smaller portions of bitcoin in units is called a “Satoshi”, named after Bitcoin’s creator. A Satoshi is the smallest fraction of bitcoin that can be recorded on the blockchain and equals one hundred-millionths of a whole bitcoin (0.00000001 BTC). 

The name caught on around 2010 after a lot of discussion concerning the topic came up in forums. Sometimes traders refer to one Satoshi as a “Sat” which is just an abbreviation. A “bit” is another terminology used to describe a millionth of a bitcoin.

The Case for Using mBTC Over BTC Denominations Using Satoshis and bits as a language to discuss smaller bitcoin denominations is more widely used than mBTC. A few symbols have been created to represent a Satoshi measurement, but nothing has gained widespread adoption.


Would it be Easier to Explain to New Users(?):

The Case for Using mBTC Over BTC Denominations Throughout the past few weeks, the topic of changing the denomination language has come up in forums a lot more than usual. On May 11, one bitcoin proponent describes why people should think about mBTC units, saying that it would be far easier to communicate to new users.  

“Many new people that ask to me about bitcoins are “scared” by the fact that to buy a bitcoin you need several thousand of euros,” explains the post.

To buy 0.05 of “something” sounds weird and little. So I think the community would greatly benefit if it switches to mBTC in exchanges and wallets. Also for shopping it would be easier to think that you are paying for a beer that costs three mBTC and not 0.003 BTC.

Others believe things are just fine the way it is and it would be too difficult for the community and industry to adopt this language.

 Furthermore, some believe wallets companies, exchanges, and bitcoin-based businesses should decide to use whatever they prefer.

Moreover, due to the rise of miner fees, some say the proposal of mBTC units is futile as many smaller denominations of bitcoin held in wallets can’t be used and are essentially unspendable addresses.

For now changing the language of bitcoin units probably won’t happen very quickly but there are those that believe the cryptocurrency environment is still young and starting this trend now would be helpful for communication.

What do you think about promoting the use of mBTC for smaller bitcoin denominations? Let is know in the comments below.

Max Supply: Defined in CryptoCurrency

Max Supply: Defined in CryptoCurrency 












Maximum Supply:

The maximum supply of a cryptocurrency refers to the maximum number of coins or tokens that will be ever created. This means that once the maximum supply is reached, there won’t be any new coins mined, minted or produced in any other way.


Normally, the maximum supply is capped by the limits defined by the underlying protocol of each digital asset. Therefore, the maximum supply and issuance of new coins are usually defined at the genesis block according to the project’s source code (which also defines many other features and functionalities).


Setting a steady issuance rate together with a predefined maximum supply can be valuable for controlling the inflation rate of a cryptocurrency, which may potentially lead to a long-term appreciation of the asset. Generally speaking, when the maximum supply is reached, there will be fewer coins available on the market. This is expected to create market scarcity, which may eventually lead to deflation conditions (or 0% inflation rates).


However, some cryptocurrencies do not have a predefined maximum supply, meaning they can be mined or minted continuously. Ethereum is a notable example of a cryptocurrency system that has no predetermined maximum supply. Ether’s supply is constantly increasing as new blocks are generated.

Max supply vs. total supply:
As mentioned, the calculation of max supply includes all coins that were already produced (or mined) plus the coins that are yet to be issued (in the future). On the other hand, the total supply includes only the coins that were already produced minus the units that were destroyed, for instance, in coin burn events.